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Why are Community-Oriented Businesses so successful?

Community-oriented businesses are booming. Also, platform businesses because they create value by bringing together two or more interdependent groups. As illustrated by some of the most illustrious ambassadors Airbnb, Uber, Etsy, TaskRabbit, Wework, and Amazon. The model has been disrupting traditional businesses for decades and there is no sign of slowing. They dominate the economic landscape like never before. Due to strong competition, legacy companies are embracing the model or they will face dark days.

Takeaways:

platform businesses can scale rapidly by leveraging the power of their community. That is certainly, the reason why investors love platforms so much. Consequently, They are more valuable than linear businesses. They have been growing rapidly both on the local stage and globally. The graph below illustrates how platform businesses in the S& P 500 grew over the past decades. In addition, the graph also portrays a forthcoming reality they will overtake all major traditional linear businesses by 2020.

Advantages of community-oriented businesses :

Rapid growth: platform businesses leverage the power of their community to scale fast after validation of the concept.

Shared value: The most important impact of a community-oriented business model is the shared value created for all its community. It provides the opportunity for users to interchange role from consumers to producers of goods or services.